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The Scenario:
Suppose I have an apache web server running on a machine and the web root folder has the above index.html as well as the banner.png image sitting under the "images" directory under web root. A user requests the page from a remote location using the server's domain http://phantom007.com, the user's browser will render the html page along with the image.

1) How does the user's browser render the image that has a relative path in a remote location?
2) Does the image file also gets transferred to the client's machine?
3) If the answer to the above is "yes", in which medium / format does it get transferred? I mean via the headers or something else?